There’s an exception to the rule prohibiting law firms from depositing firm funds into the IOLTA trust account.
Example Scenario
-Client gives law firm $10,000 of advance funds.
-Check is deposited to IOLTA account.
-Two days later, firm receives notice the $10,000 check bounced. The bank...
Connecticut IOLTA trust accounting rules are detailed in Connecticut Practice Book, Rules of Professional Conduct, Rule 1.15.
Section 1.15.J requires the following items
General Ledger J.1 – Chronological report of all deposits and withdrawals from the trust account with a running...
Complete examples of IOLTA Trust account reconciliations are rare. Our intro video provides a quick overview of a complete IOLTA Trust account reconciliation. Use the button below to download a copy of the example reconciliation used in the video.
We help law firms pay vendor bills by automating their accounts payable process. This video provides an introduction to our processes and software tools.
S Corps Control Social Security and Medicare Taxes
When a law firm is taxed as an S Corp, the primary tax savings are achieved by controlling social security and medicare taxes.
Law firm owners must pay the social security and medicare taxes withheld from employee paychecks and they must pay the...
For many of our law firm accounting clients, we record all QuickBooks transactions. Some firms prefer to directly record client costs in QuickBooks. This video provides a guide for recording law firm client costs in QuickBooks Online.
Choosing to be taxed as an S Corp does trigger several additional costs.
Payroll Service
S Corp owners are required to receive wages through payroll checks. If the law firm does not have a payroll services in place, a payroll service must be started.
Unemployment Taxes
Once the firm owner...
What’s a reasonable salary for the owner of a law firm?
The IRS won’t specifically define reasonable, there are only guidelines. The IRS notes that the courts have considered the following facts when reviewing salary levels:
- Duties and responsibilities.
- Time and effort devoted...
Gathering tax documents is such a joy. Having to store the documents for several years is even more joyful. How long do you need to wait before getting rid of tax documents?
Suggested Retention
- Tax returns, supporting schedules, and W-2s should be kept forever. The documents may be needed...
